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Stocks to watch for Thursday, December 14

Cisco Systems (CSCO) said it has invested $50 million in China Communications Services. Cisco and CCS have also agreed to jointly provide telecommunications services, such as network operation and administration, to business customers in China.

Citigroup (C) said it has agreed to buy the subsidiaries of Central America's Grupo Cuscatlan from Corporacion UBC Internacional SA for $1.51 billion in cash and stock. Citigroup will buy Grupo Cuscatlan's banking and financial intermediaries, including pension and insurance operations in El Salvador.

Insmed (INSM) shares rose 25% after the biopharmaceutical company said recent study results confirm that Iplex, a treatment for growth failure, allows more flexibility in handling and administration for patients and caregivers.

LodgeNet Entertainment (LNET) said it has agreed with Liberty Media Holding (LINTA) to purchase Ascent Entertainment Group Inc., which owns On Command Corp., for $380 million. The purchase will be paid at closing by issuing 2.05 million LodgeNet shares, and $332 million in cash.

Merck (MRK) said a federal court jury in New Orleans has found in favor of Merck and rejected a claim that its Vioxx painkiller caused the 2003 heart attack of a Tennessee man. In the case, Anthony Wayne Dedrick took Vioxx for about six months before his heart attack at the age of 47.

Microsoft (MSFT) and Hewlett-Packard (HPQ) said they have entered a 3-year agreement to sell technology products and services. The companies said they would invest at least $300 million to cover their collaborative efforts.

Midwest Air Group (MEH) said it declined AirTran Holdings Inc.'s $290 million acquisition offer because, in part, Midwest's product and service are not "readily compatible with a merger with another carrier."

Monster Worldwide (MNST) said former officials intentionally backdated options grants and that it was lowering nine years of earnings.

Supervalu (SVU) said it now expects fiscal 2007 per-share earnings of $2.32 to $2.43, up from its previous range of $2.18 to $2.41. The Minneapolis-based supermarket operator also narrowed its 2007 pro forma outlook, saying it now sees per-share earnings of $2.66 to $2.74. The previous pro forma earnings outlook was $2.62 to $2.80 a share for the year.

Teekay Offshore Partners (TOO) said it has priced its initial public offering of 7 million common units at $21 per unit. The units will trade on the New York Stock Exchange under the symbol "TOO."

United Technologies (UTX) backed its 2006 earnings outlook of $3.68 to $3.69 a share. Analysts polled by Thomson First call expect per-share earnings of $3.69. United Technologies also said its board approved a share repurchase program for up to 60 million shares worth about $4 billion at current prices.

Varsity Group (VSTY) said it has reduced its employee headcount, closing its IQ Digital unit, as part of its cost reduction program that will focus the company's energy on its core book and uniform businesses. Varsity said it sees 2007 cash overhead savings of $4.1 million to $4.7 million. The company expects associated costs of $700,000 in the fourth quarter.

The president of Yum Brands (YUM) Taco Bell unit said his company is "assuming accountability that we are part of the outbreak" of E. coli that has sickened 71 people in five states. Greg Creed made the admission to reporters in a conference call following news that lettuce not green onions is the likely source of the contamination.

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